ACPA May Have Some Teeth After All

A lawsuit brought by Facebook against cybersquatters is the first in a long while to result in substantial damages under the Anticybersquatting Consumer Protection Act (ACPA).

In Facebook, Inc. v. Cyber2Media, Inc. et al, (ND Cal. CV11-03619), the Federal Court for the Northern District of California awarded Facebook damages of $2.8 Million dollars. Brand owners have long complained that judges are reluctant to order much more than the minimal $1,000 per domain statutory damages. Does this case mark a turn in the road?

In the Facebook case, the court seems to have been influenced by several factors: the number of domains involved; the fact that many of them contain the exact letters of the famous Facebook trademark, rather than misspellings; the fact that many of the websites to which the domains resolve are copies of the site; and the fact that for certain domains there was an attempt to conceal the registrant’s identity. 

In all, there were 10 defendants and 105 domains involved in the case. All of the defendants defaulted by not appearing in court and the damages were awarded in response to Facebook’s motion for default judgment.

Showing some moderation and denying Facebook’s request for the maximum statutory damages penalty of $100,000 per domain, the court said “while Default Defendants’ misconduct was willful and comprises the behavior that the ACPA is designed to prevent, the Court is hesitant to apply the maximum penalty in a default setting. This does not mean, however, that the failure of Default Defendants to participate in the litigation should mean that they should be ordered to pay the minimum statutory damages.”  The court then went on to double the calculated damages for certain domains due to “the egregiousness of this conduct” and the fact that some defendants were serial cybersquatters.

This case may be the exception to low damages under the ACPA, but it should give brand owners some reason to hope that, at least in extreme cases, a judge will see the wisdom of sending a strong message to professional cybersquatters and ordering damages in a range that was intended by the clear language of the Act. 

Unfortunately, brand owners usually fall victim to cybersquatters who have even fewer infringing domain names in their portfolio than Cyber2Media had. CADNA’s research has shown that the average number of cybersquatted domains per registrant is 2.1, which is lower than the average of 10.5 in this case. So, the ACPA is going to need some more teeth if it is going to chew out cybersquatting effectively.

– Guest Contributor, Steve Levy, Counsel

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